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Buying a home in Mexico as a foreigner is an exciting opportunity, whether you're looking for an investment property, a vacation home, or a permanent residence. However, the process differs from what buyers in the U.S. and Canada may be used to. Understanding the legal framework, financial requirements, and step-by-step process will help ensure a smooth transaction.

Step 1: Define Your Budget and Financing Options

One of the most important aspects of buying property in Mexico is understanding how you will fund the purchase. Unlike in the U.S. or Canada, Mexico is largely a cash market, meaning mortgages for foreigners are rare and often come with high interest rates (typically between 9-11%). Due to this, many buyers secure financing in their home country or purchase with cash.

Plan for Closing Costs

In addition to the purchase price, buyers should account for closing costs, which typically range between 7-8% of the property price. These costs include:

Notary Fees: Required for legalizing the transaction (more on this below).
Acquisition Tax: A one-time tax (around 2-4% depending on the state).
Registration Fees: To officially register the property in your name.
Legal Fees: If using a lawyer for due diligence and contract review.
Fideicomiso Fees: If applicable, for setting up the trust.

Step 2: Choose the Right Location and Property for Your Goals

Once you understand your budget, the next step is to research locations that fit your lifestyle and investment goals. Popular areas in the Riviera Maya for foreign buyers include Playa del Carmen, Tulum, Puerto Morelos, Cancun, Los Cabos, and Merida.

Key factors to consider include:

Property appreciation.
Rental demand.
Proximity to amenities, beaches, or tourist attractions.
Security and accessibility.

Step 3: Work with a Reputable Licensed Real Estate Agent

Unlike in some countries, real estate in Mexico is not heavily regulated, so it’s crucial to work with a reputable, licensed real estate agent who understands the market and can guide you through the legalities.

While it’s true that many agents operate without proper accreditation, verifying credentials is straightforward. In Quintana Roo, a real estate license through SEDETUS is mandatory, and any agent should be able to provide proof upon request.

Without a centralized MLS and with varying levels of professionalism, it can be tough to find an agent or agency you can trust to look out for your best interests. Take your time to interview your agent. Favor word-of-mouth recommendations.

Paradise Listings is a fully licensed real estate group with an office in Playacar. We offer:

Licensed & Certified Agents – Every agent is properly accredited under Quintana Roo regulations.
Complimentary Legal Vetting – Through our alliance with Lighthouse Legal Services, every deal is carefully vetted before signing. These legal services are complimentary, which represents cost savings for you.
Bilingual & Trilingual Service – We assist clients in English, French, and Spanish.
Resales & Pre-Construction – We work with both, depending on the client’s goals.
360 Support - We have established relationships with ancillary service providers, such as notaries, inspectors, interior designers, and property managers.

Even as a younger agency, we’ve built a strong track record with satisfied clients by prioritizing transparency and due diligence.

Step 4: Sign an Offer Letter (Carta de Oferta)

Once you find a property, you’ll submit an Offer Letter (Carta de Oferta) through your real estate agent. This document serves as an initial agreement between the buyer and seller, outlining key terms such as:

The proposed purchase price.
The timeline for due diligence and closing.
Any conditions of the sale.

After signing the Offer Letter, the property is taken off the market for a 15-day period, during which the buyer conducts due diligence. At this stage, you typically make a refundable deposit of $5,000 USD (this amount can vary based on the owner or developer) to secure the property while the necessary verifications take place.Step 5: Sign the Official Contract

Step 5: Sign the Official Contract (Contrato de Promesa de Compraventa)

If everything checks out during due diligence, the next step is to sign the Promissory Agreement (Contrato de Promesa de Compraventa). This contract is legally binding and formalizes the terms of the purchase. It typically includes:

The purchase price and payment schedule.
The timeline for closing.
Any penalties for non-compliance by either party.

Difference Between Carta de Oferta and Contrato de Promesa de Compraventa

The Carta de Oferta is a preliminary, non-binding agreement that allows the buyer to reserve the property while conducting due diligence.
The Contrato de Promesa de Compraventa is the official, legally binding contract that finalizes the agreement and outlines the payment obligations.

Step 6: Due Diligence and What a Real Estate Lawyer Verifies

During the 15-day due diligence period, your real estate lawyer will verify:

Property title and ownership records to confirm the seller has the legal right to sell the property.
That the property is free of liens, debts, or encumbrances.
That the land is not ejidal (communal land) unless properly regularized.
The zoning and land use permissions to ensure it aligns with your intended use.
The existence of required permits for construction and legal use.
Condo association regulations and any pending fees.

If any red flags arise, you can choose to walk away and have your $5,000 deposit refunded, or negotiate solutions before proceeding.

Step 7: Set Up a Fideicomiso (Property Trust)

Foreigners buying property in the Restricted Zone (within 50 km of the coast or 100 km from an international border) must purchase through a Fideicomiso, a real estate trust held by a Mexican bank. This trust allows you to hold full ownership rights, sell, rent, or pass the property to heirs.

If you are considering an investment in the Riviera Maya in a place like Tulum, Playa del Carmen, or Cancun, you will need to acquire your property through a fideicomiso.

What is a Fideicomiso?

A Fideicomiso is a bank trust, where the bank holds the title of the property on your behalf while you retain all control and ownership rights. The trust lasts 50 years, renewable indefinitely.

Key Benefits:

Gives you the same legal property rights as a Mexican citizen.
Protects your investment within a secure structure.
Enables inheritance without going through Mexican probate.

Costs:

Setting up a fideicomiso typically costs between $2,000-$3,000 USD, with annual maintenance fees of $500-$800 USD.

Step 8: Final Payment and Closing

After completing the due diligence process, you will sign the final Escritura Pública (Deed of Sale) before the Notario. At this stage, you will:

Make the final payment (or arrange financing release).
Pay closing costs (as mentioned earlier).
Receive an official property deed, officially transferring ownership.

The Notario will then register the property in your name with the Public Registry.

Step 9: Obtain Your Property Tax Documents

Once the purchase is complete, ensure you:

Register for annual property taxes (predial)—typically very low compared to North America.
Set up utility accounts (water, electricity, internet).
Select a home insurance plan (recommended)